U.S. Chamber Applauds Senate for Passing Bankruptcy Reform Act

WASHINGTON, DC – The United States Chamber of Commerce today applauded the Senate for passing legislation reforming the nation's bankruptcy laws and relieving small businesses and retailers of the burdens imposed by loopholes in the current system.

The bill would end the massive abuses that have severely burdened small businesses and retailers, abuses which resulted in a record 1.4 million bankruptcy filings in 1998 and cost American companies an estimated $40 billion.

"The majority of Americans and business owners should not be forced to pay higher interest rates, banking fees and consumer prices because others with the ability to pay simply chose not to pay," Chamber President and CEO Thomas J. Donohue said. "Bankruptcy law was designed to provide individuals under extreme financial duress with a fresh start, not let people who can pay off the hook."

The legislation would require people who have the ability to pay their debts to file under "Chapter 13," where courts establish timely repayment plans, instead of "Chapter 7," which erases all debts. Current law encourages debtors to take advantage of numerous loopholes and avoid paying debts.

The Chamber has lobbied strongly for the legislation, which has broad support from members of both parties. "This bill will impose more personal responsibility into the lax system of bankruptcy laws that we have now," Donohue said.

The White House and Congress must guard against provoking the Federal Reserve to tighten rates further to squelch an inflation threat fueled by government actions, according to the Chamber. Proposed significant new spending, increasing the minimum wage and raising regulatory burdens is a prescription for inflation.

The U.S. Chamber of Commerce is the world's largest business federation representing more than three million businesses and organizations of every size, sector, and region.

- END -

00-15